SEOUL, South Korea — North Korea’s economy has been ravaged by United Nations sanctions and the coronavirus pandemic. The government has warned of a severe food shortage. An unidentified intestinal disease began spreading among citizens in June.
And yet the country has conducted more missile tests this year than in any previous year. The government is giving new luxury homes to party elites. Kim Jong Un, North Korea’s leader, has promised to develop advanced technology for the nation’s growing weapons arsenal. A new nuclear test — the country’s seventh — is expected to happen any moment.Where has the money come from?
In April, the United States identified a key part of the puzzle when it publicly accused North Korean hackers of stealing $620 million in cryptocurrency from the video game Axie Infinity.
The theft, one of the largest of its kind, provided the strongest evidence that cryptocurrency heists have become a highly lucrative yet relatively risk-free way for North Korea to raise funds to buttress the regime during the pandemic and to finance its weapons development.Poor, isolated and heavily sanctioned, North Korea has long resorted to illicit activities to gin up badly needed cash. It has trafficked in weapons, illegal drugs and counterfeit U.S. $100 bills. Its workers have dug tunnels for the Myanmar military and built statues and monuments for African dictators. It has unleashed hackers to disrupt foreign websites and steal from corporations and banks.More recently, with its borders shut because of the pandemic and traditional banks strengthening their firewalls against hackers, cryptocurrency theft has become an increasingly vital source of foreign currency for the regime. Its hackers are accused of stealing $571 million from cryptocurrency exchanges between January 2017 and September 2018 and $316 million from 2019 to November 2020.
